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Although President Biden has yet to make a decision about a general student loan forgiveness program, millions of students have already had $25 billion in debt forgiven under his administration. Check how to apply before the deadline!
The Biden administration altered the Public Service Loan Forgiveness Program in the fall of 2021. Thousands more debtors have gotten $8.1 billion in student debt relief since then.
Many others, though, who may be qualified for the program because of a temporary waiver, are running out of time to petition for loan forgiveness. The Public Service Loan Forgiveness program, or PSLF, was established in 2007 to assist nonprofit and government employees by canceling their student debts after ten years of payments (120 total payments).
How To Apply For Student Loan Cancelation?
According to a September 2021 story from The Washington Post, just one in every five of the 1.3 million debtors pursuing debt discharge under PSLF were on track to obtain relief by 2026.
The US Department of Education announced a change in 2021 that temporarily waives specific PSLF requirements to give borrowers credit toward loan cancellation regardless of their federal loan type or if they were enrolled in a specific payment plan, as long as they consolidated their debt before the waiver expired.
Before the waiver, borrowers had to obtain a particular government loan - a Direct Loan - to be eligible for PSLF. Borrowers could combine their debt into PSLF Direct Loans; however, any payments made on the loans before consolidation did not count toward the minimum sum.
This waiver is due to expire on October 31, 2022, giving eligible borrowers only roughly four months to apply. The head of Federal Student Aid, Richard Cordray, stated earlier this week at a conference that while he is lobbying for the PSLF waiver to be extended, President Biden may lack the administrative power to authorize such a move, according to The Hill.
Meanwhile, the moratorium on student loan payments is set to expire on August 31, and debtors are anticipated to begin payments in September. President Joe Biden's decision on universal student loan forgiveness is taking longer than anticipated, but there has been some good news during his presidency: over $25 billion in student loan debt has been canceled since 2021.
While $25 billion may appear to be a substantial sum, it pales about the wider picture of student loan debt. One in every five Americans owes money on student loans, totaling $1.6 trillion in debt, or an average of $37,013 per borrower.
Biden ran in 2020 on canceling at least $10,000 in student loan debt for everyone, and on April 28 promised a decision in the coming weeks, but more than two months have gone by with no movement on universal debt cancellation.
Maine Cancels Student Loans of Almost 59,000 Debtors
The most significant modifications to PSLF allow borrowers to consider all past payments made on Federal Family Education Loans and Perkins Loans and remove full-amount and on-time payment criteria. Borrowers must, however, file a PSLF application before Oct. 31, 2022, in order to obtain this assistance. Keep in mind that if you need to combine your debt to qualify for PSLF relief, the procedure can take 45 days, so plan ahead of time to meet the end-of-October deadline.
Visit the PSLF Help Tool on the Federal Student Aid website for additional information about PSLF policy changes and to determine if you are qualified for the program and the waiver for prior payments, as per CNET.
Furthermore, according to recent statistics from Student Loan Hero, nearly 59,000 Mainers would be debt-free if President Biden follows through on his proposal to erase $10,000 of debt for every borrower.
Despite having the lowest population density in the United States, borrowers in Maine owe a total of $6.6 billion in government and private debt, ranking them 34th in the nation. If each borrower had $10,000 deducted from their loan, 32.9 percent of borrowers would no longer have any debt.
There are roughly 200k individuals in the Pine Tree State alone who are managing an average amount of $31,801 with monthly payments averaging $263, WGAN reported.
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